This SREIT has resilient earnings, a robust balance sheet and no immediate refinancing needs

This SREIT has resilient earnings, a robust balance sheet and no immediate refinancing needs

By: 
PC Lee
26/04/17, 12:21 pm

SINGAPORE (April 26): CIMB expects Parkway Life REIT earnings to remain one of the most resilient in the SREIT space, with its deflation-protected Singapore revenue and long-term lease structure in Japan.

In addition, it expects the remaining asset disposal gains of $3.95 million to be paid out in equal instalments over the next three quarters.

With the terming out of its loans due in FY18, PREIT also does not have any refinancing needs till FY19 and balance sheet remains strong with gearing at 37.6%.

In 1Q17, PREIT posted a 0.2% uptick in gross revenue to $26.9 million from a year ago while distribution income came in 9.6% higher y-o-y at $19.84 million, thanks to earnings from acquisitions made in 2016, a stronger yen, interest savings and $1.35 million capital distribution from asset divestments.

(See alsoParkway Life REIT sees 9.6% rise in 1Q DPU to 3.3 cents)

In addition, there was one month of contributions from new acquisitions it made in Feb 2017. This was partly offset by income vacuum from the sale of four properties in Japan.

DPU of 3.28 cents accounts for 23% of CIMB’s FY17 forecast.

Singapore contributed 62.5% of NPI in 1Q17. NPI from Singapore hospitals rose 0.6% y-o-y to $15.6 million, thanks to higher income from Gleneagles while income from Mount Elizabeth Hospital and Parkway East remained stable.

Japan NPI saw a marginal 1% y-o-y dip to $9.4 million due to loss of income from the four properties it sold in Dec 2016 for $48.9 million or at a 6.1% yield. This was partly offset by around one month of new income of about $0.4 million from the $59.5 million worth of new properties purchased in Feb 2017. CIMB expects contributions from Japan to pick up in the coming quarters with the impact of a full-quarter’s income from these new assets.

“We raise our DPU estimates by 1.4-5.5% for FY17-19F to reflect the capital distribution from divestment gains and additional income from new purchases,” says analyst Lock Mun Yee in a Tuesday report who is maintaining its “add” call and adjusting CIMB’s DDM-based target price to $2.71 to factor in the higher income and a lower Singapore discount rate.

Units of PREIT are trading at $2.60.

Lendlease a step closer to listing of mall REIT on SGX: reports

SINGAPORE (May 23): Australia’s Lendlease could potentially be the next REIT to list in Singapore, following the footsteps of two recent US REITs. According to The Australian, Lendlease has appointed investment banks Citigroup and DBS to handle the listing. The Singapore trust, to be named Lendlease Global Commercial REIT, could be seeded with shopping centre assets worth A$1 billion ($948 million). Listed on the Australia stock exchange (ASX), Lendlease is a integrated construction, engineering and property company. Singaporeans may also be familiar with Lendlease given the comp....
Read More >>

China defence minister to attend summit amid rising US tension

(May 22): Chinese Defence Minister Wei Fenghe will address top diplomats at an upcoming summit in Singapore in a speech that could be pivotal amid rising tensions between the US and China. The International Institute for Strategic Studies (IISS) announced the late addition Monday to a roster of ranking officials that includes US Acting Secretary of Defence Patrick Shanahan attending the three-day IISS Shangri-La Dialogue from May 31. Wei is scheduled to deliver a speech on China’s place in the Indo-Pacific region on the final day of the conference and will take questions afterwards, wh....
Read More >>

SingHaiyi reports 48% rise in 4Q earnings to $9.7 mil on higher margins from US development

SINGAPORE (May 22): Property developer SingHaiyi Group reported a 47.6% rise in 4Q19 earnings to $9.7 million from a year ago, bringing FY19 earnings to $22.6 million, 20.3% lower than a year ago. Revenue declined 67.6% to $9.8 million from a year ago mainly due to the decrease in revenue recognised for the group’s completed Executive Condominium project, The Vales, and the group’s completed private condominium, City Suites. The lower topline was partially offset by the sales of the group’s completed commercial condominium project in the United States – Vietnam Town Phase II, whi....
Read More >>